A few nights ago I met up with recently elected member of Kuwait parliament the Right Honourable Nawaf Al Fuzaia. We discussed many things, one of which was about the prospect of doubling of the budget for the Government of Kuwait over the next 10 years.
That reminded me about C. Northcote Parkinson and his famous discussions around the same topic from the 1960’s – about what is now known as Parkinson’s Law.
To understand why Kuwait’s government budget will roughly double in the next 10 years, in summary, is because:
People, events, work, plants even, will expand to fill the space allocated to them. If there is no restraints on growth, then they will simply grow, and grow and grow.
Put more simply, Parkinson explains succinctly that in a world free of restraints, in government:
1. An official wants to multiply subordinates, not rivals,
2. Officials make work for each other.
To counter this one must place restraints. Free Market economics works very well because businesses are profit based, so there is a natural restraint upon spending, on expenses. Therefore a business will only grow if it is needed, if it is good. This is a vital restraint that is missing in most governments of the world: therefore a government will grow whether that growth is needed or not.
Restraints on budget (as for example, as a percentage of GDP), the number of people, limiting the value of government managed assets: these are ideas for restraints for government. The State can still own assets, however they are privately managed and therefore profit based – this is a PPP – Public Private Partnership: a concept gaining popularity in many parts of the world.
Parkinson’s book is available online here: Parkinson’s Law
This was the general thread of some of our discussion that evening. It was a good night.